Former Northern Virginia representative Joel T. Broyhill and a business associate have filed a $33.5 million lawsuit against Broyhill's cousin and business partner, Thomas Broyhill, accusing the cousin of "maliciously" withholding financial information about a controversial condominium project.
The suit also names as a defendant American Realty Trust, a real estate investment trust headed by Thomas Broyhill. The suit was filed in Arlington Circuit Court by Joel Broyhill and the estate of his wife Jane, and by John F. DeLuca and his wife Marilyn.
The lawsuit involves the financing of The Representative, a 209-unit luxury condominium that overlooks the Pentagon and downtown Washington and has been and subject of other litigation.
American Realty (ART) financed construction of the building but Chase Manhattan Bancorp., a New York-based bank holding company, which supplied funds for the deal through a subsidiary, later foreclosed on ART. Last December, the banking concern was awarded $2 million from ART on charges it had withheld financial information from the bank.
The latest lawsuit makes similiar allegations against Thomas Broyhill. Joel Broyhill and DeLuca charge in the suit that "actions by ART resulted in substantial damage to the(ir) financial well-being and reputation."
Their suit asks for $23 million in compensatory damages, $10 million in punitive damages and $500,000 in attorneys and legal fees.
"We've amicably resolved our differences with Chase," said Richard Shadyac, the Fairfax attorney representing Joel Broyhill and DeLuca, in an interview yesterday. "Now we're going to court to resolve our other differences."
Thomas Broyhill, president of ART, could not be reached for comment yesterday. An attorney associated with James M. Thomson, the Alexandria lawyer who represented ART in the Chase suit, declined to comment on the latest lawsuit.
In 1974, DeLuca and the Broyhill cousins formed a partnership to build The Representative with the understanding that neither Joel Broyhill nor DeLuca would be personally liable for repayment of the $12.5 construction loan from Chase. In its suit, Chase claimed it was never told of that understanding, a point it said was crucial to the project's finances.
"ART is claiming that Johnny and Joel are liable" for the loan, Shadyac said. "They're saying the agreement wasn't valid and that Tom Broyhill didn't have the authority to enter into the agreement.
He said that latest suit will attempt to resolve that question.
Last November, the 4th U.S. Circuit Court of Appeals ruled that ART violated Securities and Exchange Commission rules and defrauded investors by withholding similar information about the Arlington building.